Chapter 1

UNIVERSITY OF EDUCATION JAUHARABAD
INTERNSHIP REPORT
ALLIED BANK LIMITED

Main District Branch, Jauharabad
Submitted to:
Mr. Rana Yasir
Department of Business Administration
Submitted by:
Muhammad Zubair
BBA-Hons.
Session:
2006-2010
DEPARTMENT OF BUSINESS ADMINISTRATION

IN THE NAME OF
MOST MERCIFUL AND COMPASSIONATE THE MOST

GRACIOUS AND BENEFICENT WHOSE HELP AND
GUIDANCE I ALWAYS
SOLICIT AT EVERY STEP, AT EVERY MOMENT.
i
INTERNSHIP REPORT ON ABL KYBER BAZAAR
BRANCH PESHAWAR
APPROVAL SHEET
SUPERVISED BY -----------------------------
DESIGNATION -----------------------------
SIGNATURE -----------------------------
EXTERNAL EXAMINER
NAME -----------------------------
DESIGNATION -----------------------------
SIGNATURE -----------------------------
ii
TABLE OF CONTENTS
Sr. No. Topic Page No.
Preface vi
Acknowledgement vii
Chapter. No 1 Introduction to report 8
1.1 Background of the Study 9

1.2 Purpose of the Study 9
1.3 Nature of the Study 10
1.4 Scope of the Study 10
1.5 Methodology of Research 11
1.6 Limitations 12
1.7 Scheme of the Report 13
Chapter. No 2 Introduction to organization 14
2.1 Vision 15
2.2 Mission 15
2.3.Values 15
2.4 Meaning Of Bank 16
2.5 Meaning of Banking 16
2.6 History of ABL 17
2.7 Important Statistics about ABL 20
2.8 Main Objective 20
2.9 Operational Division 21
2.10 Management Hierarchy 22
2.11 Functional Hierarchy 23
2.12 Board of Directors 24
2.13 Management Team 25
2.14 Services of ALLIED BANK Ltd 26
2.15 Role of ABL in Banking Sector 31
Chapter. No 3 Introduction to departments 35
3.1 ABL Main Bazaar Branch 36

3.2 Current Saving Department 36
3.3 Account Department 38
3.4 Advance Department 40
3.5 Remittances Department 43
3.6 Cash Department 45
3,7 Foreign Currency Department 45
3.8 Clearing Department 46
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Sr. No. Topic Page No.
Chapter. No 4 Online banking and ATM 47
4.1 Online Banking 48

4.2 Automated Teller Machine 51
4.3 How ATM Works 54
4.4 Technical Methods that Affect the Industry 65
Chapter. No 5 SWOT Analysis 67
5.1 Strengths 68
5.2 Weaknesses 69
5.3 Opportunities 71
5.4 Threats 72
Chapter. No 6 Findings and recommendations 73
6.1 Physical Facilities 74

6.2 Availability of Staff 75
6.3 Commitment of Employees 75
6.4 Simplification of Advances 76
6.5 Marketing Concept 76
6.6 Customer Orientation 76
6.7 Mobilization of Less Cost Deposits 77
6.8 Information Access 77
6.9 Performance Audit 78
6.10 Campaign for Increasing the Deposits. 78
6.11 Relocation of Branches 78
6.12 Increases in Business Share 80
6.13 ATM Network Problem 80
6.14 Cash Deposits Using ATM. 80
6.15 Networking Among Banks. 81
6.16 Manual vouchers system., 81
6.17 Online loans 81
Chapter. No7 Financial analysis

Bibliography 82
iv
PREFACE
This Report is specially meant for the student of BBA-IT (Hons). It is

concerned to a brief study of the operation, Function, tasks and services of Allied
Bank of Pakistan.
Banking play very important role in the commerce and economic development of a
country. Now-a-days banks are using different modern technologies, which influence
the managerial activities, that’s why I decided to do my internship Training in the
bank.
In preparation of this Report is have tried my best to provide all Possible information
about the operation, function and tasks of ABL in brief and comprehensive form. It
also includes a brief department worked during internship. I have also tried my best to
use simple and easy words and language.
Then internship report ends with some recommendation after identification of some
problems observed during the course of internship.
MUHAMMAD ZUBAIR
v
ACKNOWLEDGEMENT
All praise to Almighty Allah, the most merciful and compassionate, who give me
skills and abilities to complete this report successfully
I am grateful to my parents who are always been a source of encouragement for me

throughout my life and from start to the end of this report
I am thankful to all my staff members so Allied Bank Of Pakistan main bazaar branch
jauharabad.
I found every one very co-operative and helpful for providing me the Theoretical as
well as practical knowledge about the function and operation of the bank.
I express my greatest gratitude to my kindhearted Supervisor Mr. Rana yasir

Hussain, who was the Person who made me able to write this report, His enthusiasm
shows the way forward to me to achieve this success and who kept me in high spirit
through his appreciation. He helped me a lot each time I went up to him.
MUHAMMAD ZUBAIR
vi
University Of Education
Chapter – I
INTRODUCTION TO
REPORT
7
Chapter 1
INTRODUCTION TO REPORT 1
1.1 BACKGROUND OF THE STUDY
The study is about the general operations and management of Allied Bank
Limited Main Bazar branch Jauharabad, and focuses on the online banking and ATM
(Automated teller machine), which was conducted through interviews in the branch.
Every student of BBA-Hons (MARKETING) has to under go an internship program

of eight weeks in any organization to get exposure to the real time business
environment and to know what sort of changes Information Technology brings in
management activities. The real purpose of this internship program is to provide an
opportunity to the students to see the practical applications of their background
professional studies.
The repot is a reflection on my experience when I was internee in ABL,Main Bazar

branch JauharabadSince its inception in 1969, ABL has maintained a steady growth
over the sixty years span of its operations. After its nationalization in 1974, it was
denationalized in 1991 and the employees became the owners of ABL, through the
unique concept of ESOP (Employees Stock Ownership Scheme).
1.2 PURPOSE OF THE STUDY

Purpose of the study was two pronged.
1.2.2 General Purpose

• To get acquaintance to the banking operations.
• To know what sort of changes IT brings in managerial activities.
• To see the application of our Professional studies especially.
8
1.2.3 Specific Purpose

Specific purpose of the study includes.
• A partial fulfillment as a requirement for the completion of BBA (Hons)
degree.
• To objectively observe the operations of Allied Bank of Ltd in general and the
operations of ABL, Main Bazar branch Jauharabad in specific.
• To make recommendations or implementation plans for the improvement of
the operations of ABL, Main Bazar branch Jauharabad in the light of our
professional studies.
1.3 NATURE OF THE STUDY

The study is critical in nature. It was conducted to investigate critically into the
operations of Allied Bank Ltd and it also explains that how ABL provides facility of
online banking to its customers. The annual reports or the consolidation data of the
Bank has not been focused in specific because it does not reflect on the operational
performance of branches. However, they have been referred to as when and where
required.
1.4 SCOPE OF THE STUDY

The study covers two areas with its variables, which affects the operations of
the branch directly, or indirectly. These two areas of variables are:
• Branch specific variable.
• Bank specific variable.
The branch specific variables are the variables under the control of the branch
management and directly affect its operations e.g.
• Layout of the branch.
• Customers’ relations.
• Departments in the branch
• ATM
• Online banking.
9
The bank specific variables are those variables, which are not in control of the branch
management e.g.
• History of ABL
• Services provided by ABL
• Role of ABL
1.5 METHODOLOGY OF RESEARCH

The research methodology adopted was as follows
1.5.1. Data Sources

Both primary and secondary have been used in the compilation of this report.
The methodology used is as under:
During the compilation of this report, I relied mainly on the primary data. The tools
used for the collection of primary data are interviews and observation. To get primary
data I also performed some practical work. The secondary data was mainly used for as
a background material and for purpose of references. The major sources of secondary
data were the annual report 2009; other printed material of the Bank and internet
played a vital role as a source of secondary data.
1.5.2. Research Approaches

Keeping in view my limitations during and the nature of the study, two
research approaches were adopted. These research approaches are:
• Survey.
• Observation as.
 Participant observation and

 Non-participant observation.
10
1.5.3. Sampling Plan

Details of the sampling plan used during this report are given below.
1.5.4. Sampling Unit

The sampling unit constitutes of the following.
• Manager of ABL jauharabad branch.

• Staff of ABL jauharabad branch.
• Customers.
• Personnel from Regional operations department.
• ATM coordinators
1.5.5. Sample Size

The sampling size constituted of
• All the customers coming into the Bank.

• Five bank managers.
• Fifteen staff members.
• Two personnel from operation department.
• Three ATM coordinator of different branches
1.5.6. Sampling Procedures

The sampling procedure used was non-probability judgmental and
convenience procedure.
1.5.7. Contact Method

Personal contact method was used as a contact method, which included:
• Structured interviews with managers and personnel from operations
department.
• Unstructured interviews with staff members.
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• Structured interviews with stuff related to ATM

1.6 LIMITATIONS
The Study was subject to the following limitations, the absence of which could
have made this report more accurate, systematic and factual:
• Lake of published financial data.
• Lack of ATM’s back hand information with stuff.
• Access to data.
• The non cooperative behavior of some managers and staff members.
• My weak financial position.
1.7 SCHEME OF THE REPORT

The report has been divided into six chapters. A brief introduction of these
chapters is given below:
Chapter 1 This chapter contains a brief introduction of the report.
Chapter 2 A brief organizational profile and history of ABL is presented in this

chapter, and an overview of the services offered by ABL is given in
this chapter
Chapter 3 This chapter contains brief introduction of different departments

of Main Bazar branch Jauharabad on which I worked.
Chapter 4 This chapter explains the E-banking used by the organization

. under the headings of online banking and automated Teller
Machine (ATM) and what sort of changes e-banking brought in
managerial activities
Chapter 5 It consists of SWOT analysis of the ABL Jauharabad branch
Chapter 6 It consists of the important findings of the study and the

recommendations developed in the light of these findings.
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Chapter – II
INTRODUCTION TO
THE ORGANIZATION
13
Chapter 2 2
INTRODUCTION TO THE ORGANIZATION
ABL is one of the largest banks in Pakistan, serving the Country for over 60 years in
all spheres at banking and financial Services
2.1 VISION
To become a dynamic and efficient bank providing integrated solutions and the first
choice of bank for all customers.
2.2 MISSOIN
• To provide value-added services to our customers

• To provide high-tech innovative solutions to meet customer requirements
• To create sustainable value through growth, efficiency and diversity for all
stakeholders
• To provide a challenging work environment, and reward dedicated team
members
• To play a proactive role in contributing towards the society
2.3 VALUES
• Integrity
• Excellence in Service
• High Performance
• Innovation and Growth
14
ABL has emerged as one of the foremost-privatized financial institutions in Pakistan

endeavoring to gear up its operations to meet the demands of the future.
2.4. MEANING OF BANK
Some authors write that the word bank is derived from Italian word “bancus”
OR “banque” which means a bench. Because in the old days the Jews were used to
make banking settlements by sitting on the benches & to deal the exchange of money
in the market place. When any one of them becomes insolvent means that he is unable
to fulfill his requirements. Then his bench was destroyed by the customer & this
practice given birth to the word “BANKRUPT”.
Some other Authors are of the opinion that the word bank is derived from a German
word “back”, which means “Joint Stock Fund”. & when the major part of Italy was
occupied by the German then this word ‘back’ was Italianized in to the word Bank.
However, no confident record is available to believe upon. Therefore, we are not in a

position to give any bounded meanings to bank inspire of all these we can define bank
as follow.
1 The imperial dictionary defined a bank as “An establishment for deposits &
issue f money & also for granting loans discounting bills & facilitating the
transaction from one place to another place”.
2 t is an institution, which deals with money.
3 t buys & sells the uses of money.
In other words, we can say “A bank is an institution for exchange of money,

sanctioning credit, transferring funds by domestic & foreign bills of exchange.”
We can also say that it is a pipeline through which money moves into & on of
circulation.
15
Shortly & conclusively we can say that the “Bank is an institution that facilitates the
matters in which the money is involved”.
2.5 MEANING OF BANKING

he Banking companies’ Ordinance, 1962 defines Banking as “Banking means
accepting for the purpose of lending or investment, of deposits of money from public,
repayable on demand or otherwise and withdrawal by checks, drafts, order, or
otherwise.
2.6 HISTORY of ABL
Established in December 1942 as the Australasia Bank at Lahore with a paid-

up share capital of PKR 0.12 million under the Chairmanship of Khawaja Bashir Bux,
and his business associates, including Abdul Rahman Malik who was amongst the
original Board of Directors, the bank had attracted deposits, equivalent to PKR 0.431
million in its first eighteen months of business. Total assets then amounted to PKR
0.572 million. Today Allied Bank's paid up Capital & Reserves amount to Rs. 10.5
billion, deposit exceeded Rs. 143 billion and total assets equal Rs. 170 billion. The
Allied Bank's story is one of dedication, commitment to professionalism, adaptation to
changing environmental challenges resulting into all round growth and stability,
envied and aspired by many.
2.6.1 1942 - 1947: Pre Independence
In the early 1940s the Muslim community was beginning to realize the need
for the active participation in the field of trade and industry. The Hindus had since the
late 1880s established a commanding presence in these areas and industry, trade and
commerce in the undivided Sub-continent was completely dominated by them.
Banking, in particular, was an exclusive enclave of the Hindus and it was widely
believed, and wrongly so, that Muslims were temperamentally unsuited for this
profession.
16
It was particularly galling for Khawaja Bashir Bux and Abdul Rahman Malik to hear
the gibe that Muslims could not be successful bankers. They decided to respond to the
challenge and took lead in establishing this first Muslim bank on the soil of Punjab
that was to become Pakistan in December 1942; by the name of Australasia Bank
Limited.
The initial equity of the Bank amounted to Rs 0.12 million, which was raised to Rs
0.5 million by the end of first full year of operation, and by the end of 30th June 1947
capital increased to Rs. 0.673 million and deposits raised to Rs 7.728 million.
1947 to 1974: Australasia Bank
Australasia Bank was the only fully functional Muslim Bank on Pakistan
territory on August the 14th, 1947.
It had been severely hit by the riots in East Punjab. The bank was identified with the
Pakistan Movement. At the time of independence all the branches in India, (Amritsar,
Batala, Jalandhar, Ludhaina, Delhi and Angra (Agra)) were closed down. New
Branches were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang,
Gujranwala and Kasur. Later it network spread to Multan & Quetta. The Bank
financed trade in cloth and food grains and thus played an important role in
maintaining consumer supplies during riot affected early months of 1948. Despite the
difficult conditions prevailing and the substantial set back in the Bank’s business in
India, Australasia Bank made a profit of Rs 50,000 during 1947-48.
By the end of 1970 it had 101 branches. Unfortunately it lost 51 branches in the
separation of East Pakistan which became Bengladesh. The bank did well in despite
losing lot of its assets. By the end of 1973 the bank had 186 branches in West
Pakistan.
1974 to 1991: Allied Bank
17
I 1974, the Board of Directors of Australasia Bank was dissolved and the bank
was renamed as Allied Bank. The first year was highly successful one: profit
exceeded the Rs 10 million mark; deposits rose by over 50 percent and approached Rs
1460 million. Investments rose by 72 percent and advances exceeded Rs 1080 million
for the first time in bank history. 116 new branches were opened during 1974 and the
Bank started participation in the spot procurement agriculture program of the
Government. Those seventeen years of the Bank saw a rapid growth. Branches
increased from 353 in 1974 to 748 in 1991. Deposits rose from Rs 1.46 billion, and
Advances and investments from Rs 1.34 billion to Rs 22 billion during this period. It
also opened three branches in the UK.
2.6.4 ESOP Revolution

(Employee stock ownership plan)
Under the philosophy of ESOP ownership of an enterprise is transferred to its

employees who are in an advantageous position in running the enterprise. The added
advantage of ESOP that it strengthens the workers stake in the free enterprise system,
in job securities, better profitability & unique corporate culture symbolizing family
feelings & professional fraternity.
September 10,1991 is the historical date as on this date the bank became the country’s
1st bank to be reconstituted as an institution jointly owned by its employees through
the unique concept of Employees Stock Ownership plan [ESOP] developed by the
Allied Management Group headed by Mr. Khalid Latif enabled the bank staff to react
creatively to the privatization challenge. More that 7500 staff members acquired a
share in the bank . The articulation of the ESOP is a landmark in the financial history
of Pakistan-indeed of the entire world .It is a practical step ensuring an increase in
workers participation and in productivity a means for enhancing an equitable
redistribution of financial assets & an effective strategy for achieving the cherished
goal of national self-reliance.
18
1991 to 2004: Privatization
As a result of privatization in September 1991, Allied Bank entered in a new

phase of its history, as the world’s first bank to be owned and managed by its
employees. In 1993 the First Allied Bank Modaraba (FABM) was floated.
After privatization, Allied Bank registered an unprecedented growth to become one of

the premier financial institutions of Pakistan. Allied Bank’s capital and reserves were
Rs. 1.525 (Billion) and assets amounted to Rs. 87.536 (Billion) and deposits were Rs.
76.038 (Billion). Allied Bank enjoyed an enviable position in the financial sector of
Pakistan and was recognized as one of the best amongst the major banks of the
country.
In August 2004 as a result of capital reconstruction, the Bank’s ownership was

transferred to a consortium comprising Ibrahim Leasing Limited and Ibrahim Group.
Today the Bank stands on a solid foundation of over 63 years of its existence having a
strong equity, assets and deposits base offering universal banking services with higher
focus on retail banking. The bank has the largest network of on-line branches in
Pakistan and offers various technology based products and services to its diversified
clientele through its network of more than 700 branches.
2.6.6 2005:
In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and

vested in with and into Allied Bank Limited. ILL shareholders were issued ABL
shares in lieu of the ILL shares held by them. Application for the listing of ABL
shares in all the Stock Exchange Companies of Pakistan was made. ABL was formally
listed and trading of the shares of the Bank commenced w.e.f. the following dates.
• Islamabad Stock Exchange - 8th August 2005

• Lahore Stock Exchange - 10th August 2005
19
• Karachi Stock Exchange - 17th August 2005
2007
Mohammad Aftab Manzoor has taken charge as CEO and President of the
Bank on August 13 2007. He is an ex-president of MCB Bank Ltd.
2.6.8 Today
Today, with its existence of over 60 years, the Bank has built itself a
foundation with a strong equity, assets and deposit base. It offers universal banking
services, while placing major emphasis on retail banking. The Bank also has the
largest network of over 700 online branches in Pakistan and offers various
technology-based products and services to its diverse clientele
2.7 IMPORTANT STATISTICS ABOUT ABL
Total customers 4,605,000

Employees 6,747
Total branches 735
Utility booths 34
Airport booths 1
Total clients in Peshawar region 145,000
Table 2.1
2.8 MAIN OBJECTIVE
20
The main objective of the bank is to accept deposits and provide loans to its
customers and also to be more efficient in providing services. The bank maintained its
commitment to most efficient and personalized services to its customers. Allied Bank
of Pakistan introduces many remunerative schemes for its depositors and introduces
computer services for the first time in the banking history of Pakistan. Allied bank
gives advances to small, medium and Big industries, commercial establishment,
agriculture, construction companies and other needy persons. Allied bank collects
electricity gas and telephone bills from public and over hundred branches of Allied
Bank Ltd. deal in foreign exchange were facilities are given to financial and
commercial so its ultimate objective is to receive funds from the depositors and
provides loans\credit facilities to different sector including trade, industry and
agriculture in its most branches.
2.9 OPERATIONAL DIVISION
Allied Bank has been divided into 16 regions, each under the control of a
regional General Manger (RGM). The RGM is not any fixed designation in the
organizational hierarchy. The person appointed for its position can be a SEVP and
EVP.
21
The details of these regions are given below:
Region Email
Abbottabad coablatd@brain.net.pk
Bahawalpur ro_bahawalpur@ikr.abl.com.pk
Faisalabad ablcircle@fds.comsats.net.pk
Gujranwala ro_gujranwala@lhr.abl.com.pk
Hyderabad ro_hyderabad@abl.com.pk
Islamabad ro_Islamabad@isb.abl.com.pk
Karachi ro_karachi@abl.com.pk
Lahore ro_lahore@lhr.abl.com.pk
Mardan allieds@brain.net.pk
Mirpur (AJK) ro_Mirpurak@isb.abl.com.pk
Multan ro_multani@lhr.abl.com.pk
Peshawar ro_peshwar@isb.abl.com.pk
Quetta ro_quetta@abl.com.pk
Sargodha ro_surgodha@lhr.abl.com.pk
Sialkot ro_sialkot@lhr.abl.com.pk
Sukkar ro_sukkir@abl.com.pk
Table-2.2
2.10 MANAGEMENT HIERARCHY
The management hierarchy represents the different positions and designations

in the hierarchy of the ABL. However, this is not the reporting hierarchy but merely
represents the positions and grades on the basis of seniority and grades.
22
President
Senior Vice President
Vice President
Executive Vice President
Senior Executive Vice

President [rosodmemtPresident
Regional General Manager

Managerxecutive Vice
President
Branch Manager
Figure 2.1 Management hierarchy
2.11 FUNCTIONAL HIERARCHY
23
The functional hierarchy represents the reporting order in the hierarchy of

ABL. The hierarchy has president and directors at top management level and officers
Grade I, II and Grade III at the lower level management of ABL. The middle level
management consists of regional general Manager and Regional Controller of
Operations. These positions are not fixed. Any person in the hierarchy above the
branch manager can be appointed as RGM and controller operations.
President and CEO
Board of Director
Head of Departments
Regional General Manager Controllers of Operation
Branch Manager
Office G-I, II and other lower Staff
Figure 2.2 Functional hierarch
24
BOARD OF DIRECTORS
Table 2.12
Pervaiz Iqbal Butt Mohammad Waseem Mukhtar

(Director) (Director)
Farrakh Qayyum Sheikh Mukhtar Ahmed

Abdul Aziz Khan Tasneem M. Noorani

Sheikh Jalees Ahmed Nazrat Bashir

Mohammad Aftab Manzoor\ Mubashir A. Akhtar

(CEO) (Director)
Mohammad Naeem Mukhtar
(Chairman)
2.13 MANAGEMENT TEAM

25
Asim Tufail Fareed Vardag

(Group Chief, Consumer & (Chief Risk Officer)
Personal Banking)
Iqbal Zaidi Mohammad Abbas Sheikh

(Group Chief, Compliance) (Group Chief, Special Assets
Management)
Mohammad Aftab Manzoor Muhammad Jawaid Iqbal

(Chief Executive Officer) (Group Chief, Coprate &
Investment Banking)
Muhammad Yaseen Mujahid Ali

(Group Chief, Treasury) (Group Chief, Information
Technology)
Shafique Ahmed Uqaili Syed Shahid Raza

(Group Chief, Human (Head, Business Transformation
Resources) Team)
Tahir Hassan Qureshi Tariq Mehmood

(Chief Financial Officer) (Group Chief, Operations)
Waheed ur Rehman Zia Ijaz

(Company Secretary) (Group Chief, Commercial &
Retail Banking)
Table 2.4
2.14 SERVICES OF ALLIED BANK Ltd
2.14.1 All-Time Banking

Allied Bank has introduced the Allied Cash last year also referred to as ATM
card. The customer will now have the convenience of withdrawing cash from any of
ABL’s ATMs (Auto Taller Machine) conveniently located in major cities at any time
26
of the day or night even on closed days/holidays. Other services include customer
being able to inquire about the balance of his/her account or printing an abbreviated
(mini) statement showing the most recent eight transactions up to the previous
working day.
In order to obtain Allied Cash+ Card, the customers simply have to fill out prescribed
Application form available at selected Allied Bank Branches in Karachi and Lahore.
The dully-filled form should be handed over the Manager of the Branch where the
customer is maintaining his account. Non-account holders would first have to open an
account with Allied Bank to have access to this facility. The Customer can feel
absolutely safe his Allied Cash + Card because it can only be used with the Personal
identification Number (PIN), which is given to him by the bank. Graphical
representations have been employed, where appropriate, for ease of understanding.
This topic is further explained in chapter 4.
2.14.2 Allied Umrah Aasan
This unique scheme facilities those persons, who cannot afford to incur the
lump sum expenses for Umrah. It allows the intending pilgrims (Aazmeen) to make
payment of Umrah charges in monthly installments. Its salient features are:
• It is free of interest and markup.

• Using this scheme family, relatives and household servants can be sent for
Umrah.
• Around 2500 Aazmeen are to be sent for Umrah every month.
• Lucky winners of the draw are duly informed by their respective branches.
• Total package for Aazmeen from Karachi is being Rs. 45,000. Aazmeen from
Lahore and Islamabad will have to pay an extra Rs. 3,000/- for Airline fare.
• Umrah packages are of 10 days duration. The charges include Airline return
ticket.
27
• Fee Visa, family accommodation and traveling within Saudi Arabia (Jeddah to
Makka, Makka to Madina and Median to Jeddah).
• Application for whole Family/Group can be filed through a single Application
Form. All applicants of a family/group are sent for Umrah even if only one
member of that family/group is declared successful in the draw.
• Due to any reason if Umrah Applicant needs to withdraw his/her application,
he/she will given a refund of all money deposited through installments till that
time.
• At the time of submitting the application Aazmeen has to deposit Rs. 2,000 per
person as first installment. Rest of the money is to be deposited through
monthly installments of Rs. 2,000/- person on every 5th day of the month.
• If an Applicant wins in the draw he/she is required to pay the balance amount
through monthly installments on returning from Umrah.
• Aazmeen have to submit a copy of their NI Cards and Passports with the
application.
• Applicants have to deposit the monthly installment using deposit slips still 5th
of every month. Defaulters will not be included in the draw.
2.14.3 Master Cards
The customer can now become the holder of a true Credit Card here in
Pakistan. Allied Bank under license from Master Card International, U.S.A. issues its
Master Card to anyone meeting the eligibility criteria. With the Allied Bank Master
Card the customer is assured of a service meeting the highest international standards
maintained by Master Card.
The Allied Bank Master Card helps the customer pay without the complications of
cash or checks. It doesn’t cost the customer anything if he pays in full within the due
date, but if he decides to spread the payments over several months a service charge @
2.50% per month is charged. Allied Bank – Master Card is safer than cash and simpler
than checks.
28
The customer has been an account holder with the Allied Bank to apply for the Allied
Bank – Master Card that is available to the customer for an initial fee of Rs. 2,000/-
(Rs. 500/- membership fee + Rs. 1,500/- annual fee). Once the customer obtains his
card, he simply presents it at Shops, Supermarkets, Hotels, Pharmacies, Nursing
Homes, restaurants, Petrol Pumps and hundreds of other establishments which display
the familiar Master Card sign throughout Pakistan and abroad.
Once purchases are made, the customer signs a voucher and that’s it he is not required
to take extra troubles. Every month the customer receives a statement showing details
of transactions, outstanding and the minimum amount due. The statements also give
the last date for payment so the customer can avoid paying service charges.
In order to avoid disruption in use of the card, it is essential that a least minimum
payable amount of the bill be paid regularly. In case the required payment is not
received the operation of the Master Card is automatically, suspended by the system.
In such case, the card is activated after receipt of overdue payment only.
2.14.4 Allied Tahafuz Deposit Scheme
Brings the customer unparalleled life insurance covers along with attractive
monthly profit. Minimum Deposit amount – Rs. 50,000/- or multiples thereof.
Insurance cover up to - Rs. 5,000,000/. As Competitive rate profit. The features of this
scheme are:
• Prospective client who will maintain a return free deposit for at least 3 months
shall eligible to avail interest free/mark-up free finance.
• Payment of profit on monthly basis, automatic renewal on face value.
• Life insurance up to 5 times of the customer’s deposit amount with no extra
cost.
• Premium shall be paid by the bank.
29
• Full payment of claim in case of – Death – Permanent total Disability.

• Eligibility Age – 18 to 64 years.
• No medical examination for:
- Deposit up to Rs. 500,000/- and age up to 60.
2.14.5 Allied Karzas Scheme (No Interest/Markup)
Allied Bank moves a step forwards by introducing interest free banking through
Allied Karzas Scheme. The aim of this scheme is to provide an opportunity to the
depositors to take advantage of a real Riba Free economic environment and avail
• Prospective client will maintain a return free deposit for at least 3 months shall
be eligible to avail interest free/mark-up free finance.
• Deposit amount Rs. 100,000/- and multiples thereof.
• Minimum deposit period, 3 months with automatic rollover facility.
• Premature encashment allowed, without any penalty/charge.
• Minimum deposit period for eligibility of finance, 3 months.
• Maximum period of finance, 6 months.
• Maximum period to avail finance, 12 months from the maturity of deposit.
• Every month (30 days) completed by the deposit shall be taken into account
for calculation of entitlement of finance.
• Finance proposal processing fee Rs. 100/- (non-refundable) plus
documentation cost on actual basis.
• In case of default/delay in repayment @ 0.055% per day (20.075% p.a._ to be
placed in charity A/C.
• Formula for calculation of entitlement of finance.
- Same amount of finance for half the period of deposit or

- Same period of finance for half the amount of deposit.
30
2.14.6 OTHER PRODUCTS
• Home Remittances
The Bank having a network of 755 branches all over Pakistan, undertakes to
provide safe and instant payment of remittance from expatriates, routed through
designated foreign exchange companies and correspondent banks with whom special
arrangements have been made in this regard. Through the Allied Express Services,
ABL ensures that beneficiaries’ Accounts in ABL branches are credited with in 48
hours of receiving home remittance information from overseas.
• Hajj Services
The Bank serves the intending pilgrims by helping them in performing this
religious obligation. The Hajj forms and other related services are provided by the
bank. However, the terms and conditions for accepting the Hajj forms from intending
pilgrims are in accordance with the Hajj Policy announced by the government, each
year. Hajj applications are available with all branches during Hajj season,
immediately after the Hajj policy is announced by the Government of Pakistan.
• Utility Bills
All branches of the Bank collect utility bills of electricity, gas and telephones.
For convenience of the customers, Utility Bills are collected by the branches during
banking hours and also in he evening banking on all working days. Bills can be paid
through cash or checks. Consumers may drop bills with crossed checks into a drop
box available at the branches under “Checks Drop-in” system.
• Agricultural Finances
31
Bank under Agricultural Financing Schemes envisaged by he State Bank of

Pakistan extend short, medium and long term, farm and non-farm credits. The farm
credits are extended for production (inputs) and development purposes. Non-farm
credits are allowed for livestock (goats, sheep and cattle), poultry, factory including
social forestry and fisheries (inland and marine excluding deep sea fishing).
• Lockers
Allied Bank Lockers are available in three different sizes Small, Medium and
Large on a yearly fee. Locker holders need not have an account in the Bank.
• Import Export Business/Trade Finance
ABL Provides highly efficient trade finance services for import/export

business for our clients/customers through large number of authorized branches where
trained and motivated staff is available to handle the business on behalf of customer.
• Allied Bank Rupee Travelers Checks
Carrying cash to strange alien location can prove to be risky as a single

incident can render one without monetary backup of any sort. Hence banks introduce
traveler’s checks in order to protect against any contingency.
• Seasonal Finance
 Running Finance is a short-term loan allowed by the bank for a period of one
year. The running finance account can be operated and daily sale proceeds can be
deposited into the account. The markup is recovered on the products of daily
outstanding balance. The running finance is suitable for meeting day-to-day financial
needs of the business.
32
 Cash Finance is allowed against pledge of goods. The delivery of goods is

made against payment.
 Demand Finance is disbursed in lump sum or in accordance with the agreed
disbursements schedule and it is repayable as per the agreed installments,
which could be monthly, quarterly, biannual or annual.
2.15 Role of ABL in Banking Sector
ABL is one of he most dynamic and progressive bank in the banking industry
of Pakistan. This is due to its impressive growth and development, which it achieved
during sixty years of its existence. It did not take long for Allied to grow into one of
the leading bank in the country overtaking the several other banks which were its
competitors were established earlier.
• Contribution Before/At the Time of Independence
ABL was established as a response to the cal of Muhammad Ali Jinnah for
having a Muslim representative bank in him Sub Continent. At the time of
independence when Pakistan was in intense need of banking services and expertise,
ABL rose to the occasion and rendered all its expertise at best for the development of
the newly born state.
• Commitment to Serve the Customers
ABL used novel methods of customers service instead of conventional ways of

the day, which was market oriented and appealed to if customers. ABL’s dynamic,
radical and personalized style of banking differed significantly for the conventional
business patterns of the period. In fact every feature and aspect ABL’s behavior
reflected highlighted those differences most significantly, the commitment to serve
the customers.
• Better Working Environment
33
ABL has provided its employees a better working environment and salary
structure and facilities. Incentives and awards were given to promote efficiency and
better service to customers. A competitive environment was instrumental in
introducing a thorough going professionalism, which in the ultimate analysis
transformed the entire outlook of the industry.
• Modern Banking Policy
The expansion and growth of he banking sector in Pakistan has been

remarkable. Until 1942, the growth of banking comprised the phases of laying the
foundation of the banking structure. The establishment of ABL has started a new era
in the banking system. This was the phase competition with the already established
giants. Banking underwent a complete metamorphosis; clients were naturally attracted
to the bank, which provided better and quicker banking services. When Allied Bank
challenged the major banks of the time they began evaluate their policies and were
surprised to find that they had a lot to change before long. They began to change and
adopt a more modern and relevant strategy.
• Deposit Mobilization
The banking sector as a whole and ABL in particular has played an important
role in helping to mobilized savings. The continuously rising importance of deposit
money in total money supply underscores the contribution of commercial banks in this
direction.
From its inception, ABL has launched a number of successive drives for improving
the deposit base of the Bank. An essential part of each drive was to popularize the
banking habit among the people both rural and urban, and to bring a large number of
customers into its orbit.
• Branch Expenses
34
Soon after commencing business by the end of June 1942, only few branches
had been opened. The management decided to broaden the geographical coverage so
besides the cities, the bank branched out into small towns & the far-flung, less
development and unbaked areas of fulfill its social responsibility. The branches in
small town and villages have been vital help to the small industrialists and business,
industrial workers, farmer’s craftsmen and other persons of limited means. The bank
had extended its network to more than 650 by the end of Dec. 1973. At present the
number exceeds 819 branches.
• Home Remittances Handled
The Bank contributions in handling home remittances by over seas Pakistanis

have also been commendable.
• Foreign Trade
The bank has always played key role in the promotion of foreign trade
especially in financing of exports. The bank’ achievement in the area is really
commendable, as it has not only to compete with the domestic banks but with the
large international financial agencies as well.
• Interest Free Banking
The Islamization of economic system in Pakistan began from July 1979. In Jan
1981 the PLS banking was launched. Interest free modes of financing had been
introduced, and in the first half of 1985 a number of measures over taken for complete
charge over of the whole system of domestic banking to non interest basis. And
finally the process of transaction from interest base to non-interest banking was
completed. Since the banking companies are not allowed to accept deposits (excluding
foreign currency deposits) except on the basis of Profit & Loss sharing.
35
A separate department at the head office was set up which was later on upgraded into
a full-fledged Islamic banking division apart from supervising the Islamic banking
operations. The division has conducted research and has been able to add to the
literature on Islamic banking, both of theoretical and practical significance.
• Computerization
While mechanization in ABL, began as early as in 1950’s the bank also took
the lead in introducing computers in banking operation in Pakistan and now ABL is
connected to its branches through online banking.
• Utility Booths
The bank has 34 utility booths throughout of country to accept payments, both
in the morning and in the evening against utility bills, such as gas, electricity and
telephone bills. The bank also issues television licenses.
• Prize for Success in Banking Diploma Examination
Chapter
The bank instituted– 3 for those securing highest position in bank diploma
prizes
examinations. In 1993, three bonuses were awarded in a single year to recognize and
reward to services and achievements of its employees.
•
INTRODUCTION TO
Obligation to Serve Society
THE
ABL also plays DEPARTEMENT
it part in the development of society. It has established public
libraries in many cities and towns.
36
CHAPTER 3 3
INTRODUCTION TO THE DEPARTEMENT
37
3.1 ABL Jauharabad branch
I did my internship of eight weeks in ABL MAIN BAZAR BRANCH

JAUHARABAD. It is one of the small branches of ABL, which is yet to be renovated.
I selected this branch because of two reasons. First, I was of the view that one can find
more learning opportunities in a small branch as compare to a big one. Secondly it is
situated near to my residence
In the same branch different departments of ABL are working. So I got the
opportunity to know briefly about every department
3.2 CURRENT SAVING DEPARTMENT
In ABL Main bazaar Branch current saving department mainly deals with
cheques, vouchers and advices. First of all a cheque holder have to present his/her
cheque to the person responsible for issuing the tokens. . Then cheque is passed on to
the computer operator to entry it in computer. Afterward it will go for signature
verification after which it will be given to cashier for payment.
3.2.1 COMPUTER OPERATIONS
In ABL Main bazaar branch the computer section performs several duties that
are as under:
Daily Transactions
38
To record all the transactions in case of deposits made by the people and also to
record all the withdrawals made by the people or customers. Each transaction has to
be recorded in its appropriate head of account with the help of prescribed codes.
Vouchers
To record all the vouchers made by the remittance department.

Remittance department have to prepare debit and credit vouchers for about
every transaction recorded in their department. Then these vouchers are sent to
computer operator to record those in computer.
Advices
To record all advices received from other branches. Most of the-inter

branch or intra branch- remittances are subject to ultimate receipt of advices
from the corresponding branch to materialize the transactions. These advices
also have to be recorded in computer.
Statements
To close the daily record a number of statements have to be printed

out. Statements like:
 Day’s transactions (sequence)
 Overdrawn facilitated a/c statement
 Markup sheet
 Inter branch transactions
 Detail of PLS and Current a/c

39
• Day’s transactions (a/c wise)
• Operative, Dormant, Inoperative and Unclaimed a/c
 All ATM transactions
 Detail of GL entries (official & non customer transactions)
 Summary of all a/c (debits, credits & balances)
 Profit due, transferred, disbursed, etc.
3.3 ACCOUNT DEPARTMENT
Deposits the Life Blood of a Bank
Bank borrowing funds from outside parties is more important because the
entire banking system is based on it. Receiving of deposits is a basic function of all
commercial banks. Commercial banks do not receive these deposited for safekeeping
purpose only. When the bank receives the amount of deposited as a depositor, it
become the owner of it. The bank may therefore use these deposits, as it deems
appropriate. But there is an implicit agreement that the amount owned by the bank
will be paid back to the depositors on demand or after a specified period of time.
The borrowed capital of the bank is than the bank own capital. Bank’s
borrowing is mostly in the form of deposits. These deposits are lend-out to different
parties. Larger the difference between the rate at which these deposits are borrowed
and the rate at which they lend-out the greater will be the profit margin of the bank.
Larger the funds lend-out the greater will be the return earned on them and greater the
amount of return on these deposits earned greater will be the profit for the bank. It is
because of this interrelated relationship. Deposits are referred to as the “life blood
small” for any banking sector.
KINDS OF ACCOUNT
40
There are numbers of account that ABL offers to its customer keeping in mind
their needs and dealing
1. SAVING BANK ACCOUNT P & LOSS ACCOUNT

.
In Pakistan the saving Bank accounts are know as profit and profit and loss
sharing accounts (PLS A/C) fowling the illumination of bank. The owners of such
account are not allowed to withdraw money more than once are twice a week. In case
of withdrawal of large sum, the depositor is required to give to prior notices a week or
two. Thus the bankers are not required is always available to bank for giving to loans
to their customers. Thus these deposits also serves as source of credit certain by the
commercial banks.
The rate or profit on this type of account varies from time to time. All the commercial
banks declare the rate of profit every year that is paid on these accounts on the basis
of their monthly credit balance. The bank will determine the proportion of profit & its
decision will be final. Profit will be determined on daily product basis while it will be
paid on monthly basis & will be paid on the minimum balance between the first day &
last day of the month. Zakat will be deducted on the exceeding amount as exempted
from the Zakat deduction. Taxes will be imposed according to the rules &
regulation.In Pakistan post offices & national saving centers also maintain this savings
bank account to encourage saving habits among the people.
At the time of opening this account, a minimum amount of Rs.500 is to be deposited.

Subsequently the account is opened & account number is located. The depositor is
given a cheque book.
The depositors who are wishing to close his account are required to present his
cheques to the bank in order to draw the credit balance and to close the account.
n this type of account you can open joint account also which can be operated by
anyone.
41
2. CURRENT ACCOUNT
There is no limit of withdraw of money from these accounts. In practice the

bankers do not allow any profit to such deposits in Pakistan. The customers are
required maintaining the minimum credit balance in their account in case of failing
incidental charges are recovered from defaulters. This is because the depositors may
withdraw current deposits at any time and as such the bank is not entirely free to
employ such deposits. In general, the bank allows the overdraft facilities to current
account holders & the prevailing rate of markup is charged from these customers.
In ABL the minimum amount required to open the current account is

Rs. 500. No profit is paid to account beside this that the account holder has the facility
to taking s much money as he wants.
Individual account is opened in the name of the single personal one person on whose
name it is opened only conduct it. While two opens joint account and partnership
account are more person and the bank fallow their instructions for the conduct of the
account. Similarly limited companies can also open their current account.
3. FIXED DEPOSIT ACCOUNT/TERM DEPOSITS
These deposits are also called as time deposits because these deposits are
based on the fixed duration. The period for which these deposits are kept with bank
are ranged from seven days to ten years in light of the agreement between the
customer and the banker. The profit allowed on these account depend on the duration
longer the duration of the deposits the higher will be the rate of profit.
The operation of fixed account is different from saving & current accounts. Every
time money is deposited with the bank an application from filled and the bank issue a
fixed deposit receipt for amount deposited along with specific period. Fixed deposit
42
receipt is given to the depositor and the bank retains the counterfoil of the same
receipt.
Fixed term deposits may be in the joint names of two or more person. The payment to
one of those people will not discharge by the bank without the authority of others.
3.3.1 OPENING AND OPERATION OF BANK ACCOUNT
As discuss earlier there is a prescribed procedure for opening different types of

account . Following steps re followed while opening a new account.
1. Application from for Opening of Accounting
A person who wishes to open a bank account is required to complete this from the
personal information is to be furnished. The application signs the declaration to
effect that he has understood the rules and regulation of the bank.
2. Introduction
As required by the banking law the new customer needs to be introduced by the
account holder of the same branch where the account is being opened. The manager or
any other bank officer may introduce the new customer if they know them personally.
Signature card
At the time of opening an account a specimen signature card containing two signature
of the customer is required which the manager of the branch attaches with application
form. During the operation of account the signature is verified when the cheque is
presented for payment.
Cheque Book
43
After completing formalities for opening saving and current a cheque books issued to
the customer for withdrawing cash from his or her account at the time of need. The
cheque contains minimum 25 pages & maximum 100 pages. The bank also charges
excise duty on cheque book.
3.4 ADVANCES DEPARTMENT
LENDING PRINCIPLES
The basis function of the bank is to accept deposit and lend money to the
borrowers against a spread so to be able to give some profit to the depositors as well
as to earn profit for the bank.
While lending the money to the borrowers the bank should observe the following
lending principals:
 Safety Principle
It means that the lended money will come back along with interest or service
charges etc. The borrower should not invest the money borrowed in unproductive or
speculative business.
 Liquidity Principle
The money which has been lended to the borrower should be returned to the
bank on demand or as per repayment schedule provided by the client. The sources of
repayment should be clear and definite
 Purpose Principle
44
The purpose of the advances should be legitimate and productive. It should be

ensured that the banks, funds are not being utilized for speculative business. The
credit restrictions by the central bank should not be violated & it should also be
ensured. It is always beneficial for the bank to finance for short-term requirements.
 Profitability Principle
The end result of every business activity should be to earn some profit.
Similarly the bank must get some profit out of the activity of lending so that the
depositors could get their shares as well as the shareholders could earn something for
their investments..
 Security Principle
The proposal should be dealt on its merit not on security. The security should
be considered a safety for the bank only in case of unexpected emergencies. All the
relevant documents of securities must be obtained & got valuation of the property or
any other security should be assessed correctly.
 Spreading of Risk Principle

It is always safe for the bank to spread the risk in large number of borrowers instead
of loaning huge amount to few big shots, it is better to obtain different types of
securities instead of concentrating on one security..
 National Interest and Suitability Principle
It is our moral as well as legal obligation to ensure that no loaning is running

counter to national interest. It is also our duty to ensure that our lending policies are
not against the social conditions or bindings
3.4.1 Function of Credit Department
45
The main function of the credit department is to lend money to the customer.
Allied Bank Ltd. Lends money in the form of clean advances against promissory notes
as well as secured advances against tangible and marketable securities. Beside these
ABL also lend money against life policies and immovable property..
 LIEN
Lien is the bank right to with hold property until the claim on the property is
paid. The bank looks at their lien as a protection against loss or overdraft or any other
credit facility. In ordinary lien the borrower remains the owner of the property, but the
actual or constructive possession remains with the creditor or bank though the
borrower has no right to sell it.
By Cash Credit
In this the bank lends money to the borrower against tangible security. The
total amount of the loan is not paid in one installment. The borrower has to pay
markup on the amount borrowed. Cash credit is favorite loan for large commercial &
industrial concern.
By Overdraft
This the most common type of bank lending. When a borrower requires
temporary accommodation, ABL allows its customer to withdraw an excess of the
balance form their account which the borrowing customers have in credit and thus
called overdraft. This facility is given to regular reliable & well established customer.
When it is against collateral securities, it is called “Secured Overdraft” & when
borrowing customer can not offer any collateral security except his personal security
then the accommodation is called “Clean Overdraft”.
3.4.2 Types of finance
46
 Short Term Finance
Allied Bank Ltd. receives the saving of the people and lends it for short term
to its customers. Short-term finance is generally given for a period of one year or less
in duration.
Medium Term Finance
The duration range of the intermediate term finance is from one year to three
years. It is also called term loan. Intermediate term finance is usually given for the
expansion of an existing business or for the purchase of new equipments.
Long Term Finance
This type of finance is required for the period of more than five years. Long
term finance is generally given for the compilation of big projects, for the construction
of building and for the purchase of machineries.
Producer of Applying for Loan
Any customer who applies for loan should have an account (usually current
account) with ABL branch concerned. That account must be in running position.
When approval from head office is given, branch gives tern & condition to the party.
Bank does not advance 100% loan against a security, rather the profit margin is
different in different type of loan.
3.5 REMITTANCES DEPARTMENT
47
Another important department in ABL Main bazar Branch is Remittances

Department. The remittances department transfers the funds from one bank to other
bank and from one place to another place.
In remittances department the collection take place. The ABL made payment of only
open cheques on the counter and prohibits the payment of crossed cheques.ABL
transfers money from one place to another by the following means:
Mail Transfer
When a customer requests the bank to transfer his money from this bank to
any other bank or the branch of some other bank, the first thing he has to do is to fill
an application form. In which he states that he/she wants to transfer the money from
this bank to that bank by mail. If the customer is the account holder of the bank,
operating personal will proceed further with steps like:
 Writing a debit voucher for a/c holder’s a/c
 Preparing an advice in favor of stated bank/branch
 Writing credit voucher for GL
 Mail the advice

If the customer is not the account holder of this bank, then firstly, he has to deposit the
money and than above procedure will be adopted to transfer his money.
Telegraphic Transfer
With the changing requirements of the customer, ABL has introduced the
fastest transfer of money. The sender is required to apply through a form in which he
will give all the necessary details about the sender and beneficiary. The sender
deposits the money to be transferred plus bank charges at the bank counter. The
remittances officials send a telegram to concerned branch with specified code words
and the receiving branch makes payment to the beneficiary. Vouchers are sent by
48
ordinary mail to keep the record. On TT, no excise duty is charged only commission
and telegram charges are charged.
Pay Order
Pay order is the most convenient simple and secure way of transfer of money.
It is issued by, drawn upon and payable by the same branch of the bank. It is neither
transferable nor negotiable and as such it is payable to the payee named there in. The
following are the parties to a pay order.
 Purchaser is a person, firm, company or local authority.
 Issuing/paying branch is one which issues/pays on presentation.
 Payee is a person named there in.
Demand Draft
Demand Draft is another way of transfer of money from one bank to another
bank. Unlike pay order, a form is required to be filled for the issuance of the demand
draft in which necessary particulars about the beneficiary and sender are given. The
sender deposits the amount of DD plus commission and other charges on the bank
counter, from where he is given a receipt and in accordance with this receipt he is
issued
The following are the main essential of draft:
1. It is a Negotiable Instrument.
2. Filling a form and depositing the amount written on it prepare 2} Draft.
3. It is a written order to its branches or to another bank to pay the stated amount
on draft.
3.6 CASH DEPARTMENT

49
This is the most important and critical department in a Bank. There are two
basic functions performed by the cash department. These are
Receipts
An individual who has account in the Bank can deposit money in his account.
For deposit of the money the individual has to fill the deposit slip in which the
account holder writes his name, Account number, amount of the money both in
figures and in words.
After filling the deposit slip the Cash amount along with the deposit slip is submitted
with the cashier. The cashier collects the cash and counts it and after verification the
cashier stamps the deposit slip. One part of the deposit slip is given back to the
customer and the other part of the deposit slip remains with the bank for the record
purposes
.
The cashier also record the deposits made by the customers in credit sheets daily. The
deposits of all customers of the bank are controlled by mean of ledger account. Every
customer has its own ledger account and has separate ledger cards in which his / her
total record is kept.
Bill collection is also one of the main functions of bank. Cashier has to prepare a list
of bills’ serial number, a copy of which is to be sent to the corresponding
organization.
Payments
The procedure of clearance of a cheque or payments is as following. First of

all the customer presents his cheque to the cashier The cashier records the account
number and the amount, which is to be drawn. Then the cashier check the cheque
number in the computer for the verification whether the account holder has such
50
amount in his account which he is demanding or not. If the computer passes the
cheque, the Passing officer signs the cheque and sent it to the cash counter then
cashier pays the written amount to the customer and then in the end cashier records
the amount paid in computer.
3, 7 FOREIGN CURRENCY DEPARTMENT
Like Pak rupees account the foreign currency has many accounts like
 Saving account
 Current account
 Term deposit account.

The bank deal in three type of foreign currency account
1. Dollar
2. Euro
3. Pound
The account is open with 1000 dollar if it is less 5-dollar per month is deducted. For
opening the account NIC & introduction is required of the same bank. If any person
wants to import goods from foreign, an account is required and for international
trading the FC is needed. ABL provide foreign currency on Pak rupee at booking rate
and the central office sent Rates
In foreign currency department the remittance is sent through Foreign Telegraphic

Transfer. The account holder can sent the amount in foreign bank account. If any
transaction is made the daily report is given to the central office Karachi daily.
Different accounts can b open like joint account or company account. The thankful
letter is sent for opening the foreign currency account to account holder and
introducer. When any transaction is made the bank inform stock exchange daily. The
foreign currency note is counted and recorded in the cash memo book. The people in
51
the foreign country sent the amount through S.W.I.F.T. Weekly and monthly report of
all the transaction is given to the stock exchange.
Cheque book is also issued to the account holder & the foreign currency Account
number is given to him. In this FBC & FBR is done. Debit Credit Voucher is used.
The charges are deducted while closing the foreign currency account. And the cheque
book is return while closing the account.
The branch sent excess foreign currency to its main branch. If any branch needs
foreign exchange they sent to this branch.
3.8 CLEARING DEPARTMENT
In clearing process, if the account holder of ABL receives the cheque of other
bank like City Bank, Habib Bank Limited etc, and he submits it in ABL branch to be
cashed. At the same time the clearing process starts. First the bank name. Cheque
number and the amount are written in the register. After this three kind of stamps are
required first bank name stamp, secondly clearing stamp of next date and If the
cheque is not local then the inter city clearing stamp is required.
Some cheques are local and some are outstation. The institution N.I.F.T. provides the
services in clearing the cheque. They send the different cheque to different banks. The
N.I.F.T service is only in few cities, like Karachi, Lahore, Rawalpindi. The cheque of
inter city is send through N.I.F.T. And where, the N.I.F.T service is not available so
the cheque is sent through T.C.S.
The clearance of cheque is informed through advice. Some cheque is not passed so
they should return so Rs. 100 is deducted and if the cheque is inter city then the
postage charges is deducted. For this purpose the Debit & Credit voucher is used.
When the cheque is cleared the today stamp is required. Some cheque is drawn on
ABL. This is called outward clearing. These cheques will be entered in the outward
52
clearing register. And the advice is sent for the clearance of cheques. The account
holder account is credited.
OUT WARD BILL FOR COLLECTION
OBC means the cheque of other banks. When they sent OBC the OBC is credit
& OBR is debited and the advice is made on that time, one copy is remain in the bank
and the other copy is sent to the related branch. When they realized the opposite entry
is made. It is entered in the OBC register. The income A\c commission is credited,
and postage
53
Chapter – 4
ONLINE BANKING &

AUTOMATED TELLER
MACHINE
54
CHAPTER 4 4
ONLINE BANKING &
AUTOMATED TELLER MACHINE
Being an IT student my main focus was on online banking and on automated teller
machine. I have to learn and observe that what sort of changes has been happened on
managerial activities by adopting such technologies.
4.1 ONLINE BANKING
Allied Online Banking is a unique service being offering from Allied Bank.
Through this service, your account in Allied Bank is available to you from any of our
branches countrywide. ABL is the first bank in the history of Pakistan which connects
with each branch of it through online banking. These branches can offer the facilities
of remote cheque encashment, cash deposit, funds transfer, balance enquiry and
statement of account printing to customers of other online branches besides issuance
of ATM cards to their own account holders.
4.1.1 Rules
With the introduction of online banking services in branches, the computerized

operations of the banking system in branches has become even more sensitive that’s
why the top management has set some rules and given some guidelines to each and
every branch to be followed.
1. Only authorized persons should be allowed access to the computer system of

the branch. Physical access to the branch server machine should especially
control. All maintenance activity, whether by IT Centre personnel for trouble-
shooting or by authorized service providers for hardware / communication
support should be documented. For this purpose, a separate register should be
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maintained in the branch where in the name / identity of the person concerned
along with the date and time of such activity should be recorded.
2. Personnel of the branch who have been authorized to use the system to enter
transaction or carry out end of day processing should not divulge their
password to anyone under any circumstances, in case, it is felt by the
password holder that his password has become known to someone else, it
should be changed immediately.
3. It is the responsibility of the branch to take back-ups on daily basis and to

ensure that these are sent to the IT Centre as per laid down procedure, Taking
of backup or restoring of backup of the branch based system should never be
allowed to be carried out by and outsider, Under no circumstances, should a
backup be carried out of the branch by and unauthorized person, The dispatch
of backup of IT Center/Division should only be handled by designated
couriers in sealed envelopes.
4. Use of PC workstations having removable drives and/or modem is not

allowed, Internet access / internet mail I not permitted on any workstation of
the branch system. Strict compliance of this must be ensured.
5. In case of any problems related to end-of-day processing or in respect of

hardware/ software, the matter should invariably b referred to the IT Centre.
Attempts to the fix problems without the knowledge of IT Centre staff must b
avoided.
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6. TRANSACTION AMOUNT LIMTS.
• Cash Withdrawals:
As per standing instruction the online transactions are restricted to a

maximum of
Rs. 500,000/- per instance for Cash Withdrawals.
• Third Party Cheques Encasement:
The customers can encash third party cheques of an account holder of Allied
Bank subject to a maximum of Rs. 25,000/- per instance,
• Funds Transfer:
The maximum amount is restricted to Rs. 500,000/- for funds transfer except when the
customer is transferring funds from the branch where his account is maintained, to any
other account in any ABL branch.
• Deposit of Third Party Cheques for Instant Credit:
The account holders can deposit third party cheques, either drawn in
his favor or bearer, at the branch where he holds an account for instant credit.
The maximum value of each third party cheque, which is being deposited,
should not exceed Rs. 500,000/- and utmost precautions must b undertaken to ensure
authenticity and genuineness of the third party cheques.
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7 PHYSICAL PRESENCE OF ACCOUTN HOLDER
It is essential for the account holder to present a cheque in person at the

remote branch for encashment from his account at the parent branch, The presence of
customer is necessary in case of Funds Transfer transactions, However customer
presence is not necessary for cash deposit or third party encashment of cheques up to
Rs 25,000/-
8 FUND TRANSFER.
The customers will be allowed to transfer funds from an account in the local
branch to an account in the remote branch and vice versa. In this case the “from”
account must b Customer’s own account whether in the local branch or the
destination branch and a cheque for the transfer would be required to be presented.
9 SUPERVISION OF TRANSACTIONS
All cash and Fund Transfer transactions require immediate online

supervision at the local branch before being transmitted to the remote branch for
acceptance; Supervision requires re-entry of all transactions particulars by the
Supervisor, Transactions relating to Balance Enquiries and Display of statements of
account do not require and supervision
10 KYC / CUSTOMRE DUE DILIGENCE
The banks are required to perform KYC / customer Due Diligence as per
Prudential Regulation issued by State Bank of Pakistan, Accordingly, all abnormally
high / suspicious transactions particularly cash transactions, are required to be
examined and reported to the concerned departments,
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4.2 AUTOMATED TELLER MACHINE
Allied Bank has a vast network of over 460 ATMs installed in over 130 cities,
which continues to grow at a rapid pace
The ABL Automated Teller Machine (ATM) launched in 1995 is a means of

providing customers with 24 hour cash convenience. Over the years its success has
encouraged the bank to expand its network to major cities. In the past six years, ABL
installed this convenience in Karachi, Lahore, Hyderabad, Islamabad / Rawalpindi,
Faisalabad, Multan, Gujranwala, Quetta, Sialkot and Peshawar. Further expansion
plans to other cities are on the way.
4.2.1 DEBIT CARD FACILITIES
I. Funds transfer on ATM
A card holder can transfer funds on the ATM from his account to any other
account in any branch of Allied Bank up to a maximum of Rs. 100,00 per day.
II. ATM Daily Withdrawal Limit
Previously the card holder were allowed to withdraw Rs 25, 000 per day,
which has now been enhanced as follows:
ATM Cash Withdrawal Limit :
Per transaction limit Daily limit

Rs. 25,000 Rs 100,000
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III. Debit Card on POS
The debit transactions on POS were previously up to a maximum limit of Rs

50,000 per day which has not been enhanced to Rs 100,000 per day.
IV. Other Enhancements
For the convenience of the Cardholders the following enhancements have also
been incorporated:
• Screens have now become bilingual and the card holder has the option to
opeate the ATM in English or Urdu language.
• Fast cash maximum amount, which was previously Rs 10,000, has now been
enhanced to Rs 25,000
4.2.2 GUIDE LINES FOR STANDARDISATION OF ATM OPERATIONS.
1. All branches MUST carry out ATM cash balancing / replenishment on
daily basis before running end of day without fail
A: CASH BALANCING PROCEDURE
The actual cash in ATM is to be balanced with ATM Journal Roll, in

order to identify the suspect transaction
Following steps must be taken before end of day
• : Put the ATM in Supervisory mode.
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• : Obtain ATM Cash position on ATM Journal Roll
The physical Cash in ATM must b equal to the amount appearing in the ATM
Receipt. Under no circumstances the physical Cash should be placed shot in
ATM while checking the cash in ATM, cash in the Reject Bin should also be checked
and taken into account and the print in ATM journal for Reject Cash should also be
verified.
B: In case the physical / actual cash in AT M is more than the cash appearing in
the journal then it means that customer’s account has been debited without cash
disbursement, now the individual suspected transactions are to be identified on the
basis of the verification from ATM Journal Roll, Branches should immediately
complete process of “Automatic Credit” as per procedure and time frame mentioned
below.
C PROCEDURE AND TIMELINES FOR AUTOMATIC CREDIT
o Same Bank-Same Branch

Branch to credit customer account on next business day.
o Same Bank-Different Branch (within same city)
ATM acquiring branch after verification of the transaction from their ATM
Journal Roll, must issue Credit Advice to the card issuing branch (the branch from
where the card was issued / account of the card holder is maintained) on next business
day.
o Same Bank – Different branch (different cities)
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ATM acquiring branch, * the branch where the ATM is installed) after
verification of the transaction from their ATM Journal, Roll, must issue Credit Advice
to the card issuing branch ( the branch from where the card was issued / account of the
card holder is maintained) on next business day, This whole process should be
completed within maximum 4 business days.
o ABL ATM Branch and Other Banks / Switches.
On verification by ABL ATM Branch (acquiring branch) from the PAN/ Card
number, if it appears that the cash has been retracted against the ATM card of a bank
other than ABL (First six digits of the ATM card represent the bank, in case of ABL
IMD/ Bank no, is 589430) the ABL ATM branch, after verification from the ATM
Journal Roll will issue a credit advice of the suspected transaction in favor of Bath
Island Branch, Karachi (0949) and A list containing identification number of the
different banks (IMD) is enclosed as annexure
They will send the Credit Advice through TCS to ATM Wing COK along with a copy
o the ATM Journal Roll as an evidence, ATM Wing upon receipt of the credit advice
from the ATM branch will credit the same in settlement account and will issue a Debit
Authority to the respective switch/bank authorizing them to Debit ABL’s Nostro

account against the suspected transaction for credit to the other bank’s ATM card
holder account.
D. ATM CASH REPLENISHMENT
• ATM cash replenishment is done on daily basis which is joint operation.

• The locking / opening of ATMs for replenishment is under dual control of the
officers assigned by the customer services manger.
• Following steps are performed before ATM cash replenishment
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a. Putting ATM in supervisory Mode.

b. Part of ATM Journal Roll fr same date shall be taken out and signed by
bother officers.
c. Logging in as Supervisor on UNIBANK running Option “06” for
calculation of cash replenishment position which shall b signed by both officers and
attached with vouchers
• All remaining physical cash in ATM shall be taken out and counted.
• Fresh currency notes shall be fed in to ATM according to assigned branch
limit.
4.3 HOW ATM WORKS
It is a high speed mode of transporting data from one branch or bank to

another. With ATM, you are able to transmit data in small data packets over a single
network. It can carry traffic at speeds up to 622 Mbps. Data is transmitted in fixed
length cells which gives it advantages over other methods of data transfer. ATM is a
cell switching network which takes data and breaks it into 48 bytes. These bytes are
then affixed to a 5 byte header which will contain the source and destination
information. The use of cell switching and multiplexing is employed and the
information is routed in a calculated manner. This method makes it so that your
transmission is constant and has a guaranteed capacity.
I am taking help of some diagrams to show how ATM works. In these diagrams we
can understand that how data flows in ATM.
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4.3.1 USE CASES OF ATM SYSTEM
Card insertion
Allied bank
• Use cases.
A use case describes a sequence of actions that provide something of

measurable value to an actor and is drawn as a horizontal ellipse.
In above diagram four main use cases has been drawn
1. System startup
2. System shut down
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3. Session
4. Transaction (Transaction is an abstract generalization. Each specific
concrete type of transaction implements certain operations in the
appropriate way. The flow of events given here describes the behavior
common to all types of transaction. The flows of events for the individual
types of transaction <withdrawal, deposit, transfer, inquiry> give the
features that are specific to that type of transaction)
• Actors.
An actor is a person, organization, or external system that plays a role in one

or more interactions with your system.
In above diagram there are 3 Actors
1. Operator
2. Customer
3. Allied Bank
• Associations.
Associations between actors and use cases are indicated in use case diagrams
by solid lines. An association exists whenever an actor is involved with an interaction
described by a use case
1 System Startup
The system is started up when the operator turns the operator switch to the
"on" position. The operator will be asked to enter the amount of money currently in
the cash dispenser, and a connection to the bank will be established. Then the
servicing of customers can begin.
2 System Shutdown
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The system is shut down when the operator makes sure that no customer is
using the machine, and then turns the operator switch to the "off" position. The
connection to the bank will be shut down. Then the operator is free to remove
deposited envelopes, replenish cash and paper, etc.
3 System Session
A session is started when a customer inserts an ATM card into the card reader
slot of the machine. The ATM pulls the card into the machine and reads it. (If the
reader cannot read the card due to improper insertion or a damaged stripe, the card is
ejected, an error screen is displayed, and the session is aborted.) The customer is
asked to enter his/her PIN, and is then allowed to perform one or more transactions,
choosing from a menu of possible types of transaction in each case. After each
transaction, the customer is asked whether he/she would like to perform another.
When the customer is through performing transactions, the card is ejected from the
machine and the session ends. If a transaction is aborted due to too many invalid PIN
entries, the session is also aborted, with the card being retained in the machine.
The customer may abort the session by pressing the Cancel key when entering a PIN
or choosing a transaction type\
4 System Transaction
A transaction is started within a session when the customer chooses a

transaction type from a menu of options. The customer will be asked to furnish
appropriate details (e.g. account(s) involved, amount). The transaction will then be
sent to the bank, along with information from the customer's card and the PIN the
customer entered.
If the bank approves the transaction, any steps needed to complete the transaction (e.g.
dispensing cash or accepting an envelope) will be performed, and then a receipt will
be printed. Then the customer will be asked whether he/she wishes to do another
transaction.
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If the bank reports that the customer's PIN is invalid, the Invalid PIN extension will be
performed and then an attempt will be made to continue the transaction. If the
customer's card is retained due to three invalid PINs, the transaction will be aborted,
and the customer will not be offered the option of doing another.
If a transaction is cancelled by the customer, or fails for any reason other than
repeated entries of an invalid PIN, a screen will be displayed informing the customer
of the reason for the failure of the transaction, and then the customer will be offered
the opportunity to do another.
The customer may cancel a transaction by pressing the Cancel key as described for
each individual type of transaction below.
All messages to the bank and responses back are recorded in the ATM's log.
4.3.2 SEQUENCE DIAGRAME
Sequence diagrams demonstrate the behavior of objects in a use case by

describing the objects and the messages they pass. The diagrams are read left to right
and descending
In above and below diagrams
• The rectangle represents the object of a class

• The vertical rectangle represents the object activation
• The dashed line represents the life of the object.
• The cross represents when object is destroyed.
• The arrow represents when one
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68
69
70
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4.3.3 Event Trace Diagrams
 To represent objects & events in a scenario

 Objects in transition drawn as vertical lines
 Events drawn as horizontal arrow from the sending object to receiving object
 Event timing sequence shown - timing proceeds vertically
 An object can send simultaneous events to other objects
4.3.4 Event Flow Diagram
An Event Flow diagram consists of interconnected objects and explains the flow of
data among those objects. Complex Event relationships and Synthetic Events are also
represented in an Event Flow diagram.
 Object is drawn as rectangle

 Arrow sign show the association between objects and flow of data between
objects.
In below 2 diagrams objects are.

 User
 ATM
 Consortium (An association of banks for some definite purpose)
 Bank
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EVENT TRACE DIAGRAM FOR THE NORMAL ATM SCENARI
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EVENT FLOW DIAGRAM FOR THE ATM SYSTEM
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4.4 TECHNICAL METHODS That AFFECT THE INDUSTRY
Any new technology in banking sector has its own effects because new
technology indicates the improved operation and performance of the sector.
Introduction of new technology has an extensive effect on customers. So the quick
adopters of new technologies have an edge over others in the industry.
Allied bank uses new technology in different department, which improved the quality
of services of that department.
4.4.1 CASH DEPARTMENT
Cash department involves RECIEPTS and PAYMENTS process manually.

But now ATM is used which has affected the cash department in some extent.
BEFORE
• Before ATM and online technology ABL was able to provide only 8 hours
services for payment.
• Customers were enforced to wait in huge lines for getting payments.
• To check the total amount of account customer had to give application to the
bank
• Needs number of cashier and clerks
AFTER
• Now ABL can provide 24 hour banking to its customers so that customers can
withdraw money at any time.
• Now customers have no need to wait for the payment in long queues.
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• When customer withdrawal the money and mini statement of his account is
shown to the customer.
• ATM technology reduces the extra burden on the cashier, and now bank don’t
need extra cashier and clerks
• If you need to verify your bank account balance, just sign in to your bank's
online services. No more waiting for the bank statement, or calling the bank to
get your balance. To get an accurate balance, take the bank's balance as shown
online, subtract any outstanding checks, and add any outstanding deposits.
4.4.2 REMITTANCES DEPARTMENT
The remittances department transfers the funds from one bank to other bank
and from one place to another place. ATM and online banking has also effected the
remittances department and increased its efficiency.
BEFORE
• Before ATM if customer wanted to transfer his fund to other bank account or
other branch account, then he had to submitted a cheque which takes a lot of
time for clearance process
• Before online banking to transfer the funds to other braches or to other banks
bankers had to used. DEMAND DRAFT, TELEPHONIC TRANSFER.PAY
ORDER AND MAIL TRNASFER etc.
AFTER
• Now customer can transfer money from his account to any other account at
any time any where in Pakistan, without waiting for the clearance process.
• Through online banking bankers has no need to send cheque or money through
DEMAND DRAFT. or TELEPHONIC TRANSFER etc. the banker can access
any branch and transfers funds to it with in no time.
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• In online transaction the account holder has account in another bank. The
account holder sent the amount to his account. Online transaction is made only
ABL to ABL. So they can transfer the amount, they can cash the amount they
can find the balance & receive the statement of his account in another branch.
In this type of transactions the application is filling for this purpose.
 Date
 Name
 Remote
 Account number
 Amount
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Section – V
SWOT ANALYSIS
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CHAPTER 5 5
SWOT ANALYSIS
The SWOT analysis is a comprehensive and critical overview of the

operations, procedures, rules and regulations, services and other related activities, the
analysis include the analysis of ABL Bank Main Bazaar branches in the light of the
entire branch and Bank specific variables which directly or indirectly affect the
operations of the branch. The tool selected for the analysis of organization is SWOT
analysis.
SWOT analysis
SWOT analysis is an acronym that stands for Strengths, Weaknesses,
Opportunity and Threats. This is a careful evaluation of an organization’s strengths to
avail an opportunity by overcoming its weaknesses and phasing out all he threats to its
survival in order to grow and survive.
5.1 Strengths
• This branch is provided with 3 fax machines, more than 7 telephone
connections, which makes communication easier with different branches
• The branch is linked through a online network of 755 BRANCHES, thus
enabling them to serve customer in better way.
• This branch is provided with latest computer which increases the speed of
computer work.
• The branch is situated in the commercial hub of Peshawar. This location
provides a competitive edge to the Branch.
• The branch is situated in commercial area were business activities perform
greater as compare to residential area. Thus it increases the number of customers.
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• The Branch has the most experienced and the least experienced staff, which is
a good combination of experienced heads and exuberance of youth.
• The branch is the main branch in the areas, which is another plus point for the
Branch.
• It holds the Hundi Accounts, where the payments are made through checks.
This process provides an opportunity to the Branch to have more of the Hundi
customers as the Bank customers.
5.2 Weaknesses
• The Branch has a good staff combination on the basis of experience, but their
training capabilities are not up to the requirements of the fast changing banking
environment.
• The customer’s Long-term contacts are not maintained with customers.
• The technical training of the staff is negligible e.g. in case of the absence of
computer there is no alternate trained personal who can record the daily
transactions.
• The organization is very much mechanistic and provides no flexibility to
encourage creativity.
• The lower staff is non cooperative as compared the lower staff of other
branches.
• The control of manager is not effective.
• The discretionary powers of manger are very low to offer more incentives and
value added services to its customers.
• There is a lack of commitment and professionalism on part of the employees.
The staff is always in a hurry to leave the bank as soon as possible. They were
also observed to starting their operations comparatively late.
• The organizational culture is not cooperative
• Nepotism was observed on part of the manger as well as the top management
towards some staff members.
• The branch has no industrial accounts.
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• The level of technology management in the branch is very low. The technology
available is not maintained well mainly because of the lack of technically
trained staff. For instance the scanner, in spite of its availability has not been
used for scanning the specimen signature cares.
• In spite of the presence of technology many jobs are done manually such as the
letters, drafts for fax messages and other calculations, which could be easily,
done in MS Word and Ms Excel.
• The branch lacks some physical facilities such as clean washrooms which can
affect employee’s performance
• The layout of the branch is such that it is hindering the flow of work on one
hand and the documents are lying exposed which can be easily taken away by
any person entering the branch.
• The job distribution is not up to the mark. The immediate result of this
immediate result of which is:
 The filing system is not up-to-date. Much time is wasted while searching
for even a week old document.
 The staff spent ore time in collections than required.
• Delays were observed because the prescribed procedures are not followed.
• Though ABL, Main Bazaar branch in the area it lack specialized counters or
facilities such as:
 Investment advisory counters;

 Leasing or leasing arrangements;
 Credit services.
• The four branches of Allied bank in Peshawar are closely located where most of
the services offered are not at all differentiated.
• No efforts are made to recover the outstanding debts.
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• There is no facility for receiving and satisfying complaints and inviting

suggestions.
• Foreign currency accounts are not entertained. The main reason for these
negative responses that the staff is not trained in dealing foreign currency
accounts.
• Customers’ coming to the Bank for TTs TCs etc. are not received with open
hearts and thus deprives the bank of revenues.
• Some shortcomings on part of Allied Bank of Pakistan, which affects the
operations of the bank Main Bazaar branch:
 There is a lack of functional and proper research and development, which

could scan the micro and macro environmental data for future planning and strategy.
 Financial audits are conducted but operational audits have not received
proper attention as much as it should get.
 There is no procedure, which could encourage the middle and lower level
management to initiate creativity.
5.3 Opportunities
• The biggest opportunity for the ABL, Main Bazar branch Jauharabad is the
greater number of Hindi customers who get their payments through ABL, Bank Main
Bazaar branch. These customers can be easily convinced to open their accounts with
ABL.
• A considerable portion of the labor force of the area is serving overseas. Their
families can be encouraged to use ABL as channel for remittances.
• The Internet facility in the area provides an opportunity to ABL to get Online.
• The Bank has the basic infrastructure, which can facilitate the online process.
• The location of the ABL, Main Bazaar branch itself provides an opportunity to
ABL to get more and less cost deposits.
• The group from its survey and analysis of IT companies have found out that
there are many companies which are not satisfied with its current bank.
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5.4 Threats
• The biggest threat to the operational success of the branch is the better
competitor’s services. Many private sector banks are offering higher rates of return to
customers than Allied Bank of Pakistan.
• Cannibalization of profits is yet another threat to the success of Bank Main
Bazaar branch. The branches of Allied Bank are located very close to the bank
Main Bazaar and G.T. Road branch. All these branches are taking away each
other’s customers.
• One of the biggest to the ABL, Main Bazaar branch is the increasing rate of
dissatisfies customers. Most of these customers were observed to be dissatisfied
with the delays in their servicing.
• The greatest threats to the performance of ABL, Main Bazaar branch are the
decreasing morale of employees. They feel that they are not provided with
bonuses. They are not given proper attention to have a say in the annual
meetings. The proxy forms are signed on their behalf without letting them
know.
• High-pressure interest groups are developing which poses a constant threat to
Allied Bank.
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Section – VI
FINDING AND
RECOMENDATIONS
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Chapter 6
6
FINDING AND RECOMMENDATIONS
The critical analysis ABL in the previous section is the representation of its
past, mirror of its present, and an insight into its future. The past data of ABL Main
Bazaar branch enabled me to study the organization in a historical perspective and
understand the nuisances in the banking operations. Study of he present of ABL
helped me evaluate the organization in comparison to its future and competitors. The
data obtained from the analysis of its present and future in combination with my
professional studies resulted in some suggestions and implementation plans, which
can help to increase the profitability and operational success of the ABL, Main Bazar
branch Jauharabad.
Some of the major findings suggestions are discussed.
6.1 PHYSICAL FACILITIES.
The physical facilities or the layout are the most fundamental features in an
organization, which the customers observe in forming an opinion, perception or idea
about the organization. Therefore, every organization tries to make a good first
impression on customers through the presentation of its physical facilities or layout.
The physical facilities in the branch are not up to the mark, which requires timely
changes to provide good environment to customers. The suggested changes and
corrective actions are gives below:
• The lighting system must be improved and all the out of use lights must be
replaced.
• There is always a stinking smell in the Bank due to the out of order condition
of washroom. Therefore the washroom must be brought into order to remover
this unpleasant smell.
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• Generators should be made available to the branch to minimize the disruptions

due to power failure.
• Newspaper should be provided to the customers to avoid the pain of waiting
long.
• A cash counting machine can help reduce the time spent in counting cash.
6.2 AVAILABILITY OF STAFF
The existing staff in the Bank is overburdened due to the non-availability of

more staff. Staff in the branch must be in proportion to the customer has so as to
expedite the workflow, avoid overloading of staff and remove the customer’s
grievances arising mainly due to delay in workflow.
The additional staff required is in the fallowing categories.

• More technically trained staff should be added to the existing staff
strength
• One staff assistant or grade 2 officers properly trained in computer and
sufficiently trained in foreign currency accounts.
• One employee of grade 4 should be hire on daily wages or contract, to
maintain filing.
6.3 COMMITMENT OF EMPLOYEES
The decreasing commitment of employees can be increased by introducing an

effective performance appraisal system, which can reward and recognize the
achievements and services of employees for the Bank.
The appraisal system must have the following features.
• Feed Back:
Periodically provided to employees and recognizing their efforts through
reward (bonuses) and publicly appreciation.
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• Uniform:
The appraisal system must be uniform in evaluating all the employees without
any discrimination.
• Objectivity:
The appraisal system must be based on facts and figures and objective
evaluation of the facts on grounds.
6.4 SIMPLIFICATION OF ADVANCES
The biggest source of the bank revenue is advances. The advances of ABL,
Main Bazaar branch are on him decreasing trend, causing a decrease in the revenue
for the bank. The bank should make the advance procedure simple and quick to meet
the customer’s requirements. The following steps are suggested for simplifying the
advance procedure.
• Increasing the discretion of manager for the amount of advance to Rs.

100,000.
• Speeding up the process of investigation and verification.
• Expanding its customer base.
6.5 MARKETING CONCEPT
The concept of marketing should be followed in every aspect of the

organization. Generally, the bank’s staff considers that marketing is to go to
customers, beg them for opening an account with the Bank and to abide by his every
just and unjust action
They should be taught that marketing is not only to go to customers only. A customer
can also be attracted by provided customer oriented services, showing empathy to
your customers and attending him personally.
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6.6 CUSTOMER ORIENTATION
Deposits are the main source of funds for commercial banks. Therefore, the
priority of every bank is to increase the number and amount of deposits. The key to
successful business does not lie in simply attracting new customers. The real success
is to maintain in the old customers and attract new customers at the same time because
retaining a customer is more difficult than attracting new customers.
• Every depositor should be given equal importance and there should be no

differentiation between customers so that every customer feels himself as
much important as the other customer.
• The attitude of the staff should be friendly to all the customers. The customers
should be taken to the concerned person or guided friendly if the concerned
person is not available. The attitude of “that’s not my job” should not exist
anymore.
6.7 MOBILIZATION OF LESS COST DEPOSITS
The analysis of expenses shows that 43% of expenses of the bank are the
payments on fixed deposits, which is a very high proportion. Apart from this the
interest earned on advances Rs. 0.265 million is smaller than the interest paid on
different deposits Rs. 4.1 millions
The bank should launch a campaign to get less cost deposits much as high amount
current account as well as low cost PLS saving accounts.
6.8 IINFORMATION ACCESS
The Bank should provide information to all the present and potential
customers relating to the new products, services, some service’s fee structure and
other matters, which are likely to affect the customers. It should be made sure that all
the customers have access to this information. Conveying information is of no use,
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unless, there is some feedback from the customers. The following measures are
suggested to implement this suggestion.
• Brochures, hand outs, pamphlets and other printed reports must be provided to
customers, which should provide all the information necessary to attract and
retain customers and to satisfy the customer’s need for more information.
• Personal contacts with the customers can help in providing information to
customers. All the customers must be provided a chance to get the desired
information by personal contact with the Bank staff.
• Complaint and suggestion box should be maintained at the door of the Bank
where the customers can point out drawbacks in the customer’s services and
put forward their suggestions on his improvement of the services quality of the
Bank.
6.9 PERFORMANEC AUDIT
The financial audit of the bank is conducted on regular basis both as a surprise
and routine audit. However, the performance and system audits are completely
ignored which, other wise, should have been a compulsory part of the auditing
services of the Bank. The immediate outcome of ignoring performance outcome is
shortcoming in the non-financial aspects of this organization such as customer
relations, lack of necessary facilities, motivation of employees, and the control of
manager.
In the light of the above facts it is suggested that the performance audit of the bank
must be carried out on both regular and surprise basis to keep the Bank competitive in
the run of for more customers, more deposits and high profitability.
6.10 CAMPAIGN FOR INCREASING THE DEPOSITS.
The numbers of account holders in a bank make a significant contribution to

the deposits of the Bank and determine its business volume, profits and size of a bank.
89
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Therefore, ABL, Main Bazaar branch must a clear plan for increasing the number of
accounts. The details of plan for increasing the number of accounts are given in the
implementation plan.
6.11 RELOCATION OF BRANCHES
Allied bank has five branches in Peshawar i.e.. on G.T. road, Main Bazaar. All
these branches are so closely located so that they are mostly taking away each other
customers, rather than competing the real competitors.
The location of different branches on G.T. road and Main Bazaar Peshawar
diagrammatically given in figure 7.1
Figure 7.1 Diagrammatic representation of location of different branches of ABL at

G.T. road and Main Bazaar Peshawar.
The diagram shows that the branches are closely located to each other. The distance
between these branches should be adjusted in such a way that they would not only
cover a wide customer base and
G.T Road
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S
compete the other banks without

cannibalization of its own profits.
The proposed relocation scheme of
all branches of ABL in Peshawar is
New Adda
given in the implementation plan.

Hashtnagri
Chowk Yadgar Branch
Truck Stand Branch

Firdos
90
A
Bus Stand Branch
Faqeer Abad Road
Gur Mandi Branch
G.T. Road Branch
Main
Bazaar
Main Bazaar Branch
Figure 6.1 Diagrammatic representation of location of different branches of ABL
6.12 INCREASES IN BUSINESS SHARE
Along with concentrating on increasing the customer base, the Bank must also
emphasize on securing the highest market share in other banking services such as
af
91
issuance of letter of credit, foreign exchange, remittances, bills identification of

productive secure and easily realizable advances etc. to achieve this strategy the Bank
should have a clear plans with the consent of the higher management. The plan must
be divided into different periods – weekly, monthly, semiannual and annual. Every
stage of the plan must be monitored and controlled on regular basis.
6.13 ATM NETWORK PROBLEM
I have found some problems with ATM network. Many customers have
complaints that their requests placed on ATMs don’t carry out. It is mainly because of
bad PTCL lines. Distortion in lines of PTCL restricts the execution of requests placed
on ATM machines by customers. Although there is a network of dedicated lines for
ATM machines, a request may not be successfully carried out because of complicated
request processing. A successful execution of a request needs to be approved from
three places:
 The branch (online) with which the customer (placing the request) have the
account.
 Main branch of that area (city).
 The head office (in Karachi).

So connecting to all of these three places simultaneously and getting the request
approved is a complicated process. However management claims that there is nothing
wrong with processing. The only problem lies with PCL lines. So to solve this
problem the bank should hire technicians who can work during public holidays to
make the ATM useable while it shows any distortion.
6.14 CASH DEPOSITES USING ATM.
Now-a-days in foreign countries ATM machines are also used for deposits of
money and utility bills can b paid up through ATM. But in Pakistan these services
have not been utilized yet. So if ABL upgrades its ATM technology so definitely it
will get the competitive advantage over other banks.
92
6.15 NETWORKING AMONG BANKS.
In allied bank the networking is only done with in the bank, means the
customer can’t transfer his funds to other bank through online. The account holder
who has the debit card can transfer his money to other bank account through ATM.
But the customer who doesn’t have account but some one gave him a habib bank
cheque to transfer it online through near situated Allied bank. So I recommend an idea
that there should be a networking among different banks so that they can transfer
funds via online.
6.16 MANUAL VOUCHERS SYSTEM.
As all the ledger system and vouchers are made manually which is a much
time consuming job and it also requires much more efforts most importantly human
error chances are there that’s why if the organization implement “SAP FINANCE
MODULE” in their current saving department that will help them creating automatic
vouchers and ledger if any transaction is made by customer because SAP has the
capability to keep all the records of a an individual at just one place and it has the
capacity to store much data.
Chapter – 7
6.17 OONLINE LOANS
I have found that there is no online facility to apply for a loan. Where as, in
other banks especially in foreign banks the customer who has an account in the same
Financial
bank, can apply for a loan through internet. So that he can save his time from going
physically to the bank.
93
Five Years Income Statement

Rs. In Millions
94
December 31 2004 2005 2006 2007 2008

Markup/return/interest earned 5245 9892 17216 21201 30571
Markup/return/interest expensed 794 2025 6793 10093 16560
Net markup/interest income 4451 7867 10423 11108 14011
Fee, commission, brokerage and exchange income 1520 1471 1636 2258 2522
Capital gain and dividend income 65 196 540 1585 1571
Other income 155 273 273 77 59
Non interest income 1740 1940 2449 3920 4152
Gross income 6191 9807 12872 15029 18163
Operating expenses 4115 4264 5289 6174 8399
Profit before provisions 2076 5543 7583 8855 9764
Donations - 15 9 28 82
Provisions-(expense)/reversal (1594) (694) (913) (2874) (3561)
Profit before taxation 482 4834 6661 5953 6121
Taxation (290) (1744) (2264) 1877 (1964)
Profit/(loss) after taxation 192 3090 4397 4076 4157
Five Years Balance Sheet

Rs. In millions
95
December 31 2004 2005 2006 2007 2008

Assets
Cash and balances with treasury and other banks 12320 18035 24745 30408 25751
Lending to financial institution 16175 5777 19050 18419 15793
Investment-gross 57657 45269 47156 84151 84587
Advances-gross 69949 119866 151705 178524 223640
Operating fix assets 2552 4721 6445 7549 11134
Other fix assets 7073 7908 10800 11368 18399
Total assets-gross 165726 201575 259902 330419 379304
Provision against non-performing advances (10464) (8659) (7672) (10117) (10668)
Provision against diminution in value of (336) (342) (203) (192) (1956)
investment
Total assts-net of provision 154926 192574 252027 320110 366680
Liabilities
Customer deposits 126392 161410 206031 263972 297475
Inter bank borrowings 12538 9694 18410 22934 27778
Ills payable 2534 2449 2278 3494 2952
Other liabilities 3206 4472 5119 7332 13621
Sub-coordinated loan 2499 2498 - - 344325
Total liabilities 144671 178025 234339 300231 22356
Net assets/liabilities 10256 14550 17688 19878 6464
Share capital 4405 4489 4489 5386 2341
Share premium 10640 4316 4316 3419 3463
Reserves 717 1377 1817 2632
Reserves for issue of bonus share
Un-appropriate profit/(loss) (6314) 2732 5608 6971 8537
Equity-tier I 9448 12914 16230 18408 20805
96
Financial Ratios 2003 2004 2005 2006 2007 2008

Return on equity % - 8% 28% 30% 24% 21%
Return on assets% 0.34% 0.14% 1.78% 1.98% 1.42% 1.21%
Profit before tax ratio% 16% 8% 49% 52% 40% 34%
Gross spread ratio % 77% 85% 80% 61% 52%% 46%
Return on capital employed% - 8% 28% 26% 21% 19%
Advances to deposits ratio-gross% 44 55 74 74 68 75
Advances to deposits ratio-net% 36 47% 69% 70% 64% 72%
Income to expense ratio(times) 1.4 1.5 2.3 2.43 2.43 2.16
Cost to revenue ratio 69.5% 66.50% 43.50% 41.10% 41.10% 46.20%
Growth in gross income% 14.0% 4% 58% 31% 17% 21%
Growth in net profit after tax% 136% -50% 1511% 42% -7% 2%
Total assets to shareholders’ funds(times) -24.1 16.4 14.9 15.5 17.4 17.6
Intermediation cost ratio% 3.8% 3.4% 3% 2.9% 2.6% 3%
NPL ratio% 35.7% 22% 10.6% 6.91% 6.36% 6.16%
Net infection ratio% 20.93% 8.28% 3.64% 1.96% 0.74% 1.46%
Weighted average cost of debt% 3.5% 2.45% 6.78% 9.09% 9.96% 11.50%
Capital adequacy ratio% -12.33% 16.64% 12.17% 12.80% 10.26% 10.90%
Vertical analysis (profit and loss account)
97
2003 2004 2005 2006 2007 2008

Interest/return/non interest income
Markup/return /interest income earned 75.1% 83..6% 87.5% 84.4% 86.2% 87.3%
Fee, commission, brokerage and exchange income 21.8% 12.4% 8.3% 9.0% 9.2% 7.4%
Capital gain and dividend income 0.9% 1.7% 2.7% 6.3% 4.4% 5.2%
Other income 2.2% 2.3% 1.5% 0.3% 0.2% 0.1%
Total 100% 100% 100% 100% 100% 100%
Interest/return/non interest expenses
Markup/return/interest expenses 11.4% 17.1% 34.5% 40.2% 48.7% 47.6%
Operating expenses 58.9% 36.2% 26.9% 24.7% 24.0% 20.6%
Provisions 22.8% 5.9% 4.7% 11.4% 10.0% 9.4%
Taxation 4.2% 14.7%% 11.5% 7.5% 506% 7.3%
Total expenses-percentage of total income 97.3% 73.9% 77.6% 83.8% 88.3% 84.9%
Profit/(loss)after taxation 2.7% 26.1% 21.4% 16.2% 11.7% 15.1%
100% 100% 100% 100% 100% 100%
Horizontal analysis (profit & loss account)
200 2004 2005 2006 2007 2008

3
Interest/return/non interest income earned
Markup/return/interest earned 100% 188.6% 328.2% 404.2% 582.9% 784.1%
Fee, commission, brokerage and exchange income 100% 96.7% 107.6% %148.5 %214.8 228.2%
Capital gain & dividend income 100% 301.9% 830.6% 2438.9% 2417.8 3772.8%
%
Other income 100% 176.3% 176.5% 50.1% 38.2% 23.3%
total 100% 169.4% 281.5% 359.7% 507.8% 674.0%
Interest/return/interest expense
Markup/return/non interest expensed 100% 255.0% 855.4% 1271.0% 2175.1 2823.5%
%
Operating 100% 104.0% 128.7% 150.7% 206.9% 235.8%
Provisions 100% 43.6% 57.3% 180.3% 223.4% 277.0%
Taxation 100% 601.5% 780.8% 647.4% 677.5% 1177.5%
Total expense 100% 128.7% 224.8% 309.8% 460.9% 588.2%
Profit/(loss after taxation 100% 1611.3% 2292.7% 2125.4% 2167.4 3714.0%
%
Total 100% 169.4% 281.5% 359.7% 507.8% 674.0%
98
Vertical analysis (balance sheet)

2003 2004 2005 2006 2007 2008
Cash and balances with treasury and other banks 9.50% 8.00% 9.40% 9.80% 9.50% 7.00%
Lending to financial institutions 13.10% 10.40% 3.00% 7.60% 5.80% 4.30%
Investment-net 34.70% 37.00% 23.30% 18.60% 26.20% 22.50%
Advances-net 34.60% 38.40% 57.70% 57.20% 52.60% 58.10%
Operating fixed assets 202.% 1.60% 2.50% 2.60% 2.40% 3.00%
Other assets Other assets 5.90% 4.60% 4.10% 4.30% 3.60% 5.00%
Total assets- net of provisions 100% 100% 100% 100% 100% 100%
Liabilities
Customer deposits 97.20% 81.60% 83.80% 81.70% 82.50% 81.10%
Inter bank borrowing 20.30% 8.10% 5.00% 7.30% 7.20% 7.60%
Bills payable 1.50% 1.60% 1.30% 0.90% 1.10% 0.80%
Other liabilities 2.40% 2.10% 2.30% 2.00% 2.30% 3.70%
Sub-ordinate loans 0.0% 0.0% 0.00% 0.00% 0.00% 1.00% 0.80% 0.70%
Total liabilities 103.40% 93.40% 92.40% 93.00% 93.80% 93.90%
Share capital 0.90% 2.80% 2.30% 1.80% 1.70% 1.80%
Reserves 7.30% 3.00% 2.40% 1.90% 1.60% 1.60%
Un-appropriated profit/(loss) -5.50% -4.10% 1.40% 2.20% 2.20% 2.30%
Equity - tier I - 4.10% 6.10% 6.70% 6.40% 5.80% 5.70%
Surplus on revaluation of assets 0.80% 0.50% 0.80% 0.60% 0.50% 0.40%
Total equity -3.40% 6.60% 7.60% 7.00% 6.20% 6.10%
99
Horizontal analysis (balance sheet)

31-December 2003 2004 2005 2006 2007 2008
Assets
Cash and balances with treasury and other banks 100% 110.0% 160.9% 220.8% 271.4% 229.8%
Lending to financial institutions 100% 105.3% 37.6% 124.0% 119.9% 102.8%
Investments-net 100% 140.7% 110.3% 115.3% 206.1% 202.9%
Advances-net 100% 146.3% 273.5% 374.2% 414.2% 523.8%
Operating fixed assets 100% 98.3% 181.8% 248.3% 290.8% 428.9%
Other assets 100% 101.6% 113.6% 155.2% 163.3% 264.4%
Total assets-net of provisions 100% 131.8% 163.9% 214.5% 272.4% 312.0%
Liabilities
Customer depo260.4sits 100% 110.7% 141.3% 180.4% 231.1% 260.4%
Inter bank borrowi1042.5ngs 100% 470.5% 363.8% 690.9% 860.7% 1042.5%
Bills payable 100% 143.0% 138.1% 128.5% 197.1% 166.6%
Other liabilities 100% 113.1% 157.7% 180.6% 258.6% 480.5%
Sub-ordinate loans
Total liabilities 100% 119.1% 146.5% 192.9% 247.1% 283.4%
Share capital 100% 414.3% 422.2% 422.2% 506.6% 608.0%
Reserves 100% 2035.7 1020.6 1099.4 1084.6% 1040.5%
% % %
Sun-appropriated profit/ (loss) 100% -97.3% 42.1% 76.4% 107.4% 131.5%
Equity - tier I 100% 194.0% 265.2% 333.3% 378.1% 427.3%
Surplus on revaluation of assts 100% 90.3% 182.8% 163.0% 164.3% 173.3%
Total equity 100% 258.0% 366.1% 445.0% 500.1% 562.5%
100
Bibliography
BIBLIOGRAPHY
1. Mh
uhammad Yousaf Shah. Grade-1 officer.& ATM coordinator Zonal office Sargodha..
2. Mi
an Waheed Grade-1 officer. Branch manager Jauharabad branch
3. Us
man Acountant Jauharabad Branch

4. Allied Bank Ltd Annual report (2007), Karachi.
5. Head office of NWFP performance report (2007)
6. htt
p://www.abl.com.pk
7. htt
p://www.google.com
101
102

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UNIVERSITY OF EDUCATION JAUHARABAD

ALLIED BANK LIMITED

DEPARTMENT OF BUSINESS ADMINISTRATION

MOST MERCIFUL AND COMPASSIONATE THE MOST

Sr. No. Topic Page No.

Chapter. No 1 Introduction to report 8

1.1 Background of the Study 9

Chapter. No 2 Introduction to organization 14

Chapter. No 3 Introduction to departments 35

3.1 ABL Main Bazaar Branch 36

Chapter. No 4 Online banking and ATM 47

4.1 Online Banking 48

Chapter. No 5 SWOT Analysis 67

Chapter. No 6 Findings and recommendations 73

6.1 Physical Facilities 74

Chapter. No7 Financial analysis

This Report is specially meant for the student of BBA-IT (Hons). It is

I am grateful to my parents who are always been a source of encouragement for me

I express my greatest gratitude to my kindhearted Supervisor Mr. Rana yasir

1.1 BACKGROUND OF THE STUDY

Every student of BBA-Hons (MARKETING) has to under go an internship program

The repot is a reflection on my experience when I was internee in ABL,Main Bazar

1.2 PURPOSE OF THE STUDY

1.2.2 General Purpose

1.2.3 Specific Purpose

1.3 NATURE OF THE STUDY

1.4 SCOPE OF THE STUDY

1.5 METHODOLOGY OF RESEARCH

1.5.1. Data Sources

1.5.2. Research Approaches

 Participant observation and

1.5.3. Sampling Plan

1.5.4. Sampling Unit

• Manager of ABL jauharabad branch.

1.5.5. Sample Size

• All the customers coming into the Bank.

1.5.6. Sampling Procedures

1.5.7. Contact Method

• Structured interviews with stuff related to ATM

1.7 SCHEME OF THE REPORT

Chapter 2 A brief organizational profile and history of ABL is presented in this

Chapter 3 This chapter contains brief introduction of different departments

Chapter 4 This chapter explains the E-banking used by the organization

Chapter 5 It consists of SWOT analysis of the ABL Jauharabad branch

Chapter 6 It consists of the important findings of the study and the

• To provide value-added services to our customers

ABL has emerged as one of the foremost-privatized financial institutions in Pakistan

2.4. MEANING OF BANK

However, no confident record is available to believe upon. Therefore, we are not in a

In other words, we can say “A bank is an institution for exchange of money,

2.5 MEANING OF BANKING

2.6 HISTORY of ABL

Established in December 1942 as the Australasia Bank at Lahore with a paid-

2.6.1 1942 - 1947: Pre Independence

1947 to 1974: Australasia Bank

1974 to 1991: Allied Bank

2.6.4 ESOP Revolution

Under the philosophy of ESOP ownership of an enterprise is transferred to its

1991 to 2004: Privatization

As a result of privatization in September 1991, Allied Bank entered in a new

After privatization, Allied Bank registered an unprecedented growth to become one of

In August 2004 as a result of capital reconstruction, the Bank’s ownership was

In May 2005 Ibrahim Leasing Limited was amalgamated by transfer to and

• Islamabad Stock Exchange - 8th August 2005